| 60-Second Guide to |
In the next 60 seconds, we'll usher you through the five major steps to choosing and setting up a discount brokerage account. Start your stopwatches, now...
0:57: Decide how much you'll invest
Will it be $500, $5,000, or $50,000? Some discount brokers require a minimum initial deposit of $2,000. Others require $500. And some require no minimum, or accept smaller initial deposits to open an IRA. Your first step is to figure out how much dough you plan to start with.
0:50: Consider what you'll be investing in
While we're partial to stocks, you may also want to invest in mutual funds (particularly index funds), options, bonds, or certificates of deposit (CDs). Not every online broker will offer all of these, so make sure you can buy what you want through your broker.
0:38: Compare broker fees and services
Check out and compare how much different brokers will charge in commissions and fees. For a quick comparison of four major brokerages, check out their web sites:
1. Ameritrade
2. E*Trade
3. TD Waterhouse
4. Charles Schwab
You'll of course want to find out information about trading commissions, but also compare account maintenance fees, IRA custodial fees, and other costs.
But don't simply judge online brokers by how much they charge. Some have a lot more to offer. Eyeball this checklist to help decide what additional services interest you:
1. Phone trades
2. Research products
3. Local offices
4. Check-writing capabilities
5. ATM access
6. Combo services and discounts
0:21: Do the paperwork and sign the check!
Setting up an account is usually as easy as downloading the application forms, signing them, and folding them nicely into an envelope with a check to fund your account. You'll receive confirmation of your ability to start trading in pretty short order. Voila! (Even easier is transferring your loot from your old brokerage account to a new one. They do all the work!)
0:03: Revel publicly
You're now "in the know." Memorize a few key lines to drop at the next office cocktail party: "I'm in the market for the long haul. Still, I couldn't help but click over to my discount brokerage account twice today." Or "I'm only a few trades away from owning an island in South America."
Whew! Done in just under 57 seconds. Congratulations, You've just taken a giant step toward controlling your financial future.
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